CPAs Offer Consulting Services to Help Small Businesses Succeed
July 12, 2023
Many small business owners manage their finances and decision-making on their own. However, without professional advice on topics ranging from financial health to long-term business goals, the risk of failure increases. This can also lead to a struggle with day-to-day business decisions. Given the right resources and professional advice, small business owners can alleviate stress and replace it with success.
Certified Public Accountants (CPAs) have in-depth knowledge and experience in helping small businesses succeed. CPAs often provide a wide range of business consulting services to help businesses thrive. Read on to learn more about how your CPA can help you:
CPAs Offer a Wide Range of Business Consulting Services
Entrepreneurs often get business consultations from all types of sources. Consultations could come from family members, friends, mentors, franchise resources, YouTube videos, retirement specialists, investment brokers, and so on.
Without belittling the importance of the other sources, business consultation from a CPA service provides the most comprehensive picture of a business's financial outlook. Nobody knows the bottom line better than the individuals who manage the numbers that make it up.
Even if the CPA service does not perform accounting functions for a company, they are well-trained to navigate and interpret complex business numbers and financials. Because of their in-depth knowledge of business finances, CPAs are most suited to provide the following consultation services to small businesses:
Financial Forecasting and Projections
Financial forecasting provides businesses with a visual interpretation of future expenses like startup costs and cost of goods sold (COGS). In addition to business expenses, this financial forecasting includes financial projections that evaluate future revenue. Proper financial forecasting and projections help small businesses to develop a better-informed budgeting process and also help them avoid future financial crises.
However, forecasts and projections need an expert team that thoroughly understands your business plan to extract the most vital functions of your business. For this reason, small businesses should consult a CPA. CPAs provide small businesses with financial projections reporting to help them:
- Obtain more funds from investors
- Identify issues within the business model
- Guide future business goals
- Set sales targets for the business
Cash Flow and Budgeting Analysis
Many small business owners mistake cash flow and cash flow management as synonyms for profit and loss. Even though there is a link between them, they are different. Understanding cash flow is critical in determining whether a business succeeds or fails.
Unfortunately, many small business founders lack the knowledge and time required to conduct a thorough analysis, leaving them without cash and struggling to stay afloat. However, CPAs have the expertise and skill sets necessary to provide quality cash flow services to small business owners. As professionals, CPAs help small business owners to create a healthy cash flow for their businesses to grow and thrive.
CPAs can help small businesses prepare their monthly cash flow statements and identify trends to help them with their budgeting and financial forecasting. The prepared detailed cash flow statement enables these businesses to spot periods of cash excess and shortage and plan accordingly. It also assists small business owners in establishing the cash reserve balance required to keep their daily operations running smoothly.
At some point a business owner will want to retire and exit the business. This can be done by transitioning to younger family members, selling to a third party or creating an Employee Stock Ownership Plan ("ESOP"). A CPA can help you choose the right plan for your individual situation.
A plan of action based on the business structure guarantees that all staff and dynamics are accounted for to ensure business success. In particular, this strategy is vital for family-owned businesses since personal relationships with family values are involved. A family constitution will help oversee personal and business relationships and provide a structured plan to handle business operational duties.
Most CPAs have already worked with different business owners and can assist small business owners with their specific business succession plans. CPAs provide small business owners with the best advice possible so they can be confident that their business will continue to run successfully, even after they transfer ownership. They will also provide the best advice to these founders to keep them financially successful after exiting their businesses.
Management Advisory Services
CPAs also provide management advisory services. Whether your business is in its early stage or has been in operation for a long time, it is wise to seek advice from certified management advisory consultants.
When small business owners consult CPAs, they get one-on-one strategic and operational advice from them. CPAs provide an objective viewpoint and present ideas for improving leadership skills that the founders may not have considered before. By working with different businesses, CPAs gain extensive experience, enabling them to create helpful solutions for common management issues.
Seeking advice from qualified management advisory consultants can help small businesses to continue growing. CPAs can identify key performance metrics and create new systems to improve the efficiency of small businesses' daily operations.
Assist With Benefits-Related Issues
The research and selection process for employee benefits can be complex for small business owners, especially when it involves retirement and healthcare benefits. The entire process can consume a significant amount of time and energy. Fortunately, CPAs can assist small business owners with this overwhelming task.
When small businesses consult CPAs, they can assist them in selecting the best retirement plan for their business. CPAs can also provide advice and guidance on employee health insurance plans, helping small business owners to save money in this expensive area.
Assist Small Business Owners in Planning for Future Growth
CPAs can also assist small business owners with strategic planning for their business growth. CPAs can analyze budgetary needs and spending, forecast growth, and recommend how their business can spend more efficiently.
This expert advice can help small businesses grow exponentially. When small business owners work with CPAs, they collaborate as business partners dedicated to the success and growth of their small businesses.
Advisers on Business Structure and Entity
One of the critical decisions that business owners make is deciding what type of entity to use for their new business venture. The formation of a business entity is for tax and legal purposes. Whether they choose to become a Limited Liability Company, Corporation, Partnership, S-corporation, or sole proprietorship, their decision will have tax and business consequences.
Most times, small business owners start a business without fully understanding the implications of their decision until they start facing challenges. Furthermore, there are slight differences between entities, and a firm may be able to benefit from more than one business structure in some cases. Without this knowledge, small business owners may miss out on these benefits.
That is why small business owners should consult CPAs for advice before deciding how to set up their businesses. CPAs can give small business owners the guidance they need to avoid missing benefits.
Obtain Business Consulting Services and Find Greater Success
Launching and running a small business is no easy feat. Don't struggle with decisions that are beyond your business's core offerings. Make sure you have the keys to success by accessing the right resources. CPAs have the knowledge and experience to offer consultation services that provide solutions and help your business succeed.
"Bowers & Company is a diverse team of professionals with the experience to guide our business from a small closely-held operation to a regional operation of an international conglomerate. We hold each member of its staff in high regard because of their professionalism, knowledge and general interest in our company's success. They are always in our corner."
Bowers aims to offer helpful information to our clients and friends. Learn more about how we can help should your business need accounting and financial services.
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